The Baird/STR Hotel Stock Index increased 1.6% in September to 4,634. Year to date through the first nine months of 2019, the index was up 13.9%.
“Hotel stocks posted modest gains in September, which were driven entirely by a rebound in the Hotel REIT Sub-Index,” said Michael Bellisario, senior hotel research analyst and VP at Baird. “With more stable industry-wide RevPAR growth trends in September, investors became more interested in the Hotel REITs given their discounted valuations. More broadly, interest rates increased and stock market volatility declined during the month, both of which benefitted the Hotel REITs more than the Hotel Brands on both an absolute and relative basis.”
“Any positive with the hotel stock index as a whole is encouraging given recent industry fundamentals,” said Amanda Hite, STR’s president and CEO. “Pricing weakness continues to weigh on operators’ minds, and continued healthy demand growth is not translating into higher occupancies as new supply is also on the climb. Add wider macroeconomic and political uncertainty to the equation, and we’re likely to see dampened enthusiasm around the industry continue.”
September performance of the Baird/STR Hotel Stock Index was behind both the S&P 500 (+1.7%) and the MSCI US REIT Index (+2.3%).
The Hotel Brand sub-index fell 0.2% from August to 7,238 while the Hotel REIT sub-index jumped 5.6% to 1,486.
Chesapeake Lodging Trust was acquired by Park Hotels & Resorts on 18 September 2019, and effective the same day, Hersha Hospitality Trust (HT) replaced Chesapeake Lodging Trust (CHSP) in the Baird/STR Hotel Stock Index and the Baird/STR Hotel REIT Sub-Index.
Effective 25 September 2019, Hospitality Properties Trust (HPT) changed its name to Service Properties Trust (SVC).
As of 30 September 2019, the companies that comprised the Baird/STR Hotel Stock Index included: Apple Hospitality REIT, Chatham Lodging Trust, Chesapeake Lodging Trust, Choice Hotels International, DiamondRock Hospitality Company, Extended Stay America, Hilton Inc., Service Properties Trust, Host Hotels & Resorts, Hyatt Hotels, InterContinental Hotels Group, Marriott International, Park Hotels & Resorts, Inc., Pebblebrook Hotel Trust, RLJ Lodging Trust, Ryman Hospitality Properties, Summit Hotel Properties, Sunstone Hotel Investors, Wyndham Hotels & Resorts, and Xenia Hotels & Resorts.
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